Solutions manual for foundations of business 4th edition by pride hughes and kapoor

In this context, we define business ethics and discuss the major factors believed to influence the level of ethical behavior in an organization.. Next, we define and contrast two contemp

CHAPTER 2

Being Ethical and Socially Responsible

INSTRUCTOR MANUAL RESOURCES

2.1 A Word from the Authors 39

2.2 Transition Guide 39

2.3 Quick Reference Guide 41

2.4 Learning Objectives 42

2.5 Brief Chapter Outline 42

2.6 Comprehensive Lecture Outline 43

2.7 Textbook Answer Keys 55

2.7a Concept Checks 55

2.7b Discussion Questions 59

2.7c Video Case: PortionPac Chemical Is People-Friendly, Planet-Friendly 60

2.7d Building Skills for Career Success 61

2.8 Quizzes I and II 62

2.9 Answer Key for Quizzes I and II 65

2.10 Classroom Exercises 65

2.10a Homework Activities 65

2.10b Classroom Activities 66

2.10c Exercise Handouts 66

38 © 2015 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly

accessible website, in whole or in part

2.1 A WORD FROM THE AUTHORS

The material on ethics and social responsibility is presented early in the text to underscore the

importance of business’s role in our society In this context, we define business ethics and discuss

the major factors believed to influence the level of ethical behavior in an organization We also

examine several types of ethical issues

As in Chapter 1, we turn to American history to trace the evolution of socially responsible business

practices Next, we define and contrast two contemporary views of social responsibility: the

economic model and the socioeconomic model In the process, we present arguments both for and

against increased social responsibility in business We consider social changes in three specific

areas: consumerism, employment practices, and the environment We identify public and private

agencies that regulate or monitor business practices in these areas, including the Equal Employment

Opportunity Commission and the Environmental Protection Agency Finally, we outline the steps in

the development and implementation of an effective corporate program for social responsibility

2.2 TRANSITION GUIDE

© 2015 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in

New in Chapter 2: Being Ethical and Socially Responsible

• A new Inside Business feature describes how Chipotle has expanded beyond 1,300 restaurants worldwide and increased annual sales above $2 billion

• The Nortel Networks Corporation example in the “Conflict of Interest” section has been deleted

• The “Individual Companies’ Role in Encouraging Ethics” section has been revised

• The “Social Responsibility” section describes how Walmart helped with the relief efforts after Hurricane Sandy hit the East Coast In addition to providing food and personal care products, Walmart delivered one million bottles of water in New York City and to the state of New Jersey

• Also in the “Social Responsibility” section, the discussion of General Mills has been updated Since its inception in the mid-1990s, General Mills Box Tops for Education has raised more than

$400 million to provide schools with funding for whatever students need

• A new discussion has been added on how Dell Corporation partners with the University of Texas

to invite college students from around the world to join its strong community of support and to present their innovative ideas for solving social problems

• The discussion on IBM’s World Community Grid has been revised and updated

• GE’s social responsibility activities have been updated with new examples, such as how the GE Foundation matches GE employee and retiree gifts to disaster relief organizations

• A new ExxonMobil example explains how the company’s employees, retirees, and ExxonMobil Foundation provided $278.4 million in cash, goods, and services around the world

• AT&T’s social responsibility activities have been updated In 2012, AT&T developed the

“Texting and Driving: ‘It Can Wait’ ” Simulator to show the dangers of texting behind the

wheel

• Figure 2-3, “Comparative Income Levels,” has been updated to reflect the new data on the

median household incomes of Asian, white, Hispanic, and African-American workers in 2011

• Figure 2-4, “Relative Earnings of Male and Female Workers,” has been updated to reflect the new data for 2011

• The key term National Alliance of Business and its discussion have been deleted

• A new Sustain the Planet feature explains social responsibility at Xerox for the past 40 years

• A new Entrepreneurial Success feature,“Social Entrepreneurs of Tomorrow,” describes how a growing number of young entrepreneurs are starting businesses with the goal of using their skills for a socially responsible purpose: to improve the quality of life for people all over the world

• The Scholfield Honda video case has been replaced with a new video case entitled “PortionPac Chemical Is People-Friendly, Planet Friendly.” The founders were thinking “green” long before the word came to describe an international environmental movement

• The Building Skills for Career Success section contains a new Social Media Exercise that

describes how businesses are using social networks

2.3 QUICK REFERENCE GUIDE

Transition Guide IM, pp 39–40

Learning Objectives Textbook, p 32; IM, p 42

Brief Chapter Outline IM, pp 42–43

Comprehensive Lecture Outline IM, pp 43–54

At Issue: How should employers deal with

Marginal Key Terms List Textbook, p 60

Concept Checks Textbook, pp 36, 38, 44, 46, 48, 50, 53, 57, and 59

Questions and Suggested Answers, IM, pp 55–59

Discussion Questions Textbook, p 60

Questions and Suggested Answers, IM, pp 59–60

Video Case (PortionPac Chemical Is

People-Friendly,

Planet-Friendly) and Questions

Textbook, pp 62–63 Questions and Suggested Answers, IM, pp 60–61

Building Skills for Career Success Textbook, p 63

Suggested Answers, IM, p 61

IM Quiz I & Quiz II IM, pp 62–64

Answers, IM, p 65

Classroom Exercises IM, pp 65–66

2.4 LEARNING OBJECTIVES

After studying this chapter, students should be able to:

1 Understand what is meant by business ethics

2 Identify the types of ethical concerns that arise in the business world

3 Discuss the factors that affect the level of ethical behavior in organizations

4 Explain how ethical decision making can be encouraged

5 Describe how our current views on the social responsibility of business have evolved

6 Explain the two views on the social responsibility of business and understand the arguments for

and against increased social responsibility

7 Discuss the factors that led to the consumer movement and list some of its results

8 Analyze how present employment practices are being used to counteract past abuses

© 2015 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in

9 Describe the major types of pollution, their causes, and their cures

10 Identify the steps a business must take to implement a program of social responsibility

2.5 BRIEF CHAPTER OUTLINE

I Business Ethics Defined

II Ethical Issues

A Fairness and Honesty

B Organizational Relationships

C Conflict of Interest

D Communications

III Factors Affecting Ethical Behavior

A Individual Factors Affecting Ethics

B Social Factors Affecting Ethics

C “Opportunity” as a Factor Affecting Ethics

IV Encouraging Ethical Behavior

A Government’s Role in Encouraging Ethics

B Trade Associations’ Role in Encouraging Ethics

C Individual Companies’ Role in Encouraging Ethics

VII Two Views of Social Responsibility

A The Economic Model

B The Socioeconomic Model

C The Pros and Cons of Social Responsibility

1 Arguments for Increased Social Responsibility

2 Arguments Against Increased Social Responsibility

VIII Consumerism

A The Six Basic Rights of Consumers

1 The Right to Safety

2 The Right to Be Informed

3 The Right to Choose

4 The Right to Be Heard

5 Additional Consumer Rights B Major Consumerism Forces

IX Employment Practices A Affirmative Action Programs

B Training Programs for the Hard-Core Unemployed

XI Implementing a Program of Social Responsibility

A Developing a Program of Social Responsibility

1 Commitment of Top Executives

2 Planning

3 Appointment of a Director

4 The Social Audit

B Funding the Program

2.6 COMPREHENSIVE LECTURE OUTLINE

Most managers today are finding ways of balancing a growing agenda of socially responsible

activities with the drive to generate profits

I BUSINESS ETHICS DEFINED Ethics is the study of right and wrong and of the morality

of choices individuals make Business ethics is the application of moral standards to business

situations

Teaching Tip: Ask students how they decide what is right and what is wrong Is there an internal

mechanism or process they use or a code? Follow up by asking where they learned their personal

code

II ETHICAL ISSUES Businesspeople face ethical issues every day, and some of these issues

can be difficult to assess These issues arise out of a business’s relationship with investors,

customers, employees, creditors, and competitors

A Fairness and Honesty Fairness and honesty in business are important ethical concerns

Businesspeople must obey all laws and regulations as well as refrain from knowingly

deceiving, misrepresenting, or intimidating others

B Organizational Relationships It may be tempting to place personal welfare above the

welfare of others or of the organization Relationships with customers and co-workers

© 2015 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in

often create ethical problems such as taking credit for others’ ideas or work, not meeting one’s commitments, and pressuring others to behave unethically

C Conflict of Interest Conflict of interest results when a businessperson takes advantage

of a situation for his or her own personal interest rather than for the employer’s interest

D Communications Business communications, especially advertising, can present ethical

questions Advertisers must take precautions to guard against deception

III FACTORS AFFECTING ETHICAL BEHAVIOR The factors that affect the level of eth-

ical behavior in organizations are individual, social, and opportunity (See Figure 2-1.)

A Individual Factors Affecting Ethics

1 Individual Knowledge of an Issue A decision maker with a greater amount of knowledge regarding a situation may take steps to avoid ethical problems, whereas

a less-informed person may take action unknowingly that leads to an ethical quagmire

2 Personal Values An individual’s moral values and central, value-related attitudes also clearly influence his or her business behavior

3 Personal Goals The types of personal goals an individual aspires to and the

manner in which these goals are pursued have a significant impact on that individual’s behavior in an organization

B Social Factors Affecting Ethics

1 Cultural Norms A person’s behavior in the workplace, to some degree, is

determined by cultural norms, and these social factors vary from one culture to another

2 Co-workers The actions and decisions of co-workers constitute another social factor believed to shape a person’s sense of business ethics

3 Significant Others The moral values and attitudes of “significant others”—

spouses, friends, and relatives—can also affect an employee’s perception of what

is ethical and unethical behavior in the workplace

4 Use of the Internet Even the Internet presents new challenges for firms whose employees enjoy easy access to sites through convenient high-speed connections at work An employee’s behavior online can be viewed as offensive to co-workers and possibly lead to lawsuits against the firm if employees engage in unethical behavior on controversial websites not related to their job

Teaching Tip: A classroom can be considered a workplace for the time students are there Ask

students to take a minute and write down three examples of ethical behavior in the classroom and three examples of unethical behavior Beyond the obvious cheating issues, students may mention things such as one student constantly monopolizing the instructor’s time, etc

C “Opportunity” as a Factor Affecting Ethics

1 Presence of Opportunity Opportunity refers to the amount of freedom an

organization gives an employee to behave unethically if he or she makes that choice

2 Ethical Codes The existence of an ethical code and the importance management

places on this code are other determinants of opportunity

3 Enforcement The degree of enforcement of company policies, procedures, and

ethical codes is a major force affecting opportunity

IV ENCOURAGING ETHICAL BEHAVIOR Most authorities agree that there is room for

improvement in business ethics A more problematic issue is whether business can be made

more ethical in the real world

A Government’s Role in Encouraging Ethics The government can establish acceptable

levels of behavior by passing more stringent regulations For example, the

Sarbanes-Oxley Act of 2002 gives those who report corporate misconduct sweeping new legal

protection

B Trade Associations’ Role in Encouraging Ethics Trade associations can, and often

do, provide ethical guidelines for their members to follow

C Individual Companies’ Role in Encouraging Ethics

1 Codes of ethics that companies provide to their employees are perhaps the most

effective way to encourage ethical behavior A code of ethics is a written guide to

acceptable and ethical behavior as defined by an organization that outlines uniform policies, standards, and punishments for violations

2 However, codes cannot possibly cover every situation

a) Companies must also create an environment in which employees recognize the importance of following the written code

b) Managers must provide direction by fostering communication, actively encouraging ethical decision making, and training employees to make ethical decisions

c) Assigning an ethics officer who coordinates ethical conduct gives employees someone to go to if they aren’t sure of the right thing to do

d) An ethics officer meets with employees and top management to provide ethical advice, establishes and maintains an anonymous confidential service to answer questions about ethical issues, and takes action on ethics code

violations

3 See Figure 2-2 for Texas Instruments’ code of ethics

4 Unethical practices often become ingrained in an organization

5 Employees with high personal ethics may take a controversial step called

whistleblowing—informing the press or government officials about unethical

practices within one’s organization

a) Whistle-blowing can have serious repercussions for an employee

© 2015 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in

b) The Sarbanes-Oxley Act of 2002 protects whistle-blowers who report corporate misconduct Any executive who retaliates against a whistle-blower can be held criminally liable and imprisoned for up to ten years

c) The Whistleblower Protection Act of 1989 protects federal employees who report an agency’s misconduct

6 When firms set up anonymous ethical hotlines to handle ethically questionable situations, employees may be more likely to engage in whistle-blowing

7 When firms create an environment that educates employees and nurtures ethical behavior, whistle-blowing is greatly reduced because fewer ethical problems arise

8 See Table 2-1 for general guidelines for making ethical decisions

A Social responsibility is the recognition that business activities have an impact on society

and the consideration of that impact in business decision making

1 Social responsibility can cost companies a considerable amount of money, but it is also good business

B Examples of Socially Responsible Organizations

1 Through Young Eagles, underwritten by S C Johnson, Phillips Petroleum,

Lockheed Martin, Jaguar, and other corporations, 22,000 volunteer pilots take a half million youngsters on free flights to teach flying basics

2 The General Mills Foundation, created in 1954, is one of the largest U.S

companysponsored foundations and has awarded over $1 billion to communities since its creation General Mills Box Tops for Education has raised more than $400 million providing schools with funds to meet students’ needs

3 Dell’s outreach programs include projects that bring technology to underserved communities around the world Globally, the Michael and Susan Dell Foundation has contributed more than $850 million to improve student performance and

increase access to education

4 Improving public schools around the world continues to be IBM’s top social

priority Its efforts are focused on preparing the next generation of leaders and workers IBM launched the World Community Grid in 2004 It combines excess processing power from thousands of computers in a virtual supercomputer that enables researchers to gather and analyze unprecedented quantities of data aimed at advancing research on genomics, diseases, and natural disasters

5 General Electric Company (GE) has a long history of supporting the communities where its employees work and live through its unique combination of resources, equipment, and employee and retiree volunteers The company devotes its efforts

in philanthropy to making communities around the world stronger For example, the GE Foundation matches GE employee and retiree gifts to disaster relief organizations Recently, GE employees and retirees contributed 1.3 million hours through company-sponsored programs

6 With the help of dedicated Schwab volunteers, the Charles Schwab Foundation

provides programs and funding to help adults and children learn the basics of financial literacy Since 1993, the Schwab Foundation has distributed an average of

$4 million a year to 2,300 nonprofit organizations

7 ExxonMobil’s commitment to education spans all levels of achievement Recently,

ExxonMobil Corporation, its employees, retirees, and the ExxonMobil Foundation provided $278.4 million in cash, goods, and services around the world In addition, the company celebrated 2011 International Women’s Day by granting $6 million to support economic opportunities for women around the world

8 AT&T has built a tradition of supporting education, health and human services, the

environment, public policy, and the arts in the communities it serves Since 1984, AT&T has invested more than $900 million in support of education In 2012, AT&T developed the “Texting and Driving: ‘It Can Wait’ ” Simulator to illustrate the dangers of texting behind the wheel

9 At Merck & Co., Inc., the Patient Assistance Program makes the company’s

medicines available to low-income Americans and their families at no cost For over 50 years, Merck has provided its medicines completely free of charge to people in need through this program

These are just a few illustrations from a long list of companies big and small that

attempt to behave in socially responsible ways

VI THE EVOLUTION OF SOCIAL RESPONSIBILITY IN BUSINESS

A Historical Evolution of Business Social Responsibility During the first quarter of the

twentieth century, businesses were free to operate pretty much as they chose

1 Working conditions were often deplorable by today’s standards

a) The average workweek exceeded 60 hours in most industries

b) There was no minimum-wage law

c) There were no employee benefits

d) Work areas were crowded and unsafe, and industrial accidents were the rule rather than the exception

2 During this period, consumers were generally subject to the doctrine of caveat

emptor, a Latin phrase meaning “let the buyer beware.”

a) Victims of unscrupulous business practices could take legal action, but going

to court was very expensive and consumers rarely won their cases

b) There were no consumer groups or government agencies to hold sellers responsible for their activities

3 Prior to the 1930s, government became involved in day-to-day business activities

only when there was an obvious abuse of the free-market system and competition was endangered (See Table 2-2 for a list of early government regulations affecting business.)

© 2015 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in

B The collapse of the stock market on October 29, 1929, triggered the Great Depression and years of economic problems for the United States

1 Public pressure mounted for government to “do something” about the economy and about worsening social conditions

2 As a result, laws were passed to correct what many viewed as monopolistic abuses

of big business, and various social services were provided for individuals

VII TWO VIEWS OF SOCIAL RESPONSIBILITY Government regulation and public

awareness are external forces that have increased the social responsibility of business But business decisions are made within the firm—and there, social responsibility begins with the

attitude of management There are two models of social responsibility

A The Economic Model The economic model of social responsibility holds that society

will benefit most when business is left alone to produce and market profitable products that society needs

B The Socioeconomic Model The socioeconomic model of social responsibility holds

that business should emphasize not only profits but also the impact of its decisions on society

C The Pros and Cons of Social Responsibility The merits of the economic and

socioeconomic models have been debated for years Each side seems to have four arguments

1 Arguments for Increased Social Responsibility Proponents of the

socioeconomic model offer the following arguments:

a) Business cannot ignore social issues because business is a part of our society b) Business has the technical, financial, and managerial resources needed to tackle today’s complex social issues

c) By helping to resolve social issues, business can create a more stable environment for long-term profitability

d) Socially responsible decision making by business firms can prevent increased government intervention, which would force businesses to do what they fail to

do voluntarily

2 Arguments Against Increased Social Responsibility Opponents of the

socioeconomic model offer these arguments:

a) Business managers are responsible primarily to stockholders, so management must be concerned with providing a return on owners’ investments

b) Corporate time, money, and talent should be used to maximize profits, not to solve society’s problems

c) Social problems affect society in general, so individual businesses should not

be expected to solve these problems

d) Social issues are the responsibility of government officials who are elected for that purpose and who are accountable to the voters for their decisions

3 Table 2-3 compares the economic and socioeconomic viewpoints in terms of business emphasis

4 Today, few firms are either purely economic or purely socioeconomic in outlook;

most have chosen some middle ground between the two

a) However, our society generally seems to want—and even to expect—some degree of social responsibility from business

b) Thus, within this middle ground between the two extremes, businesses are leaning toward the socioeconomic view

VIII CONSUMERISM Consumerism consists of all those activities that are undertaken to

protect the rights of consumers The consumer movement issues fall into three categories:

environmental protection, product performance and safety, and information disclosure

A The Six Basic Rights of Consumers During the 1960s, President John F Kennedy

declared that the consumer was entitled to a new “bill of rights.”

1 The Right to Safety The right to safety specifies that products purchased by

consumers must be safe for their intended use, include thorough and explicit directions for proper use, and be tested by the manufacturer to ensure product quality and reliability American business firms must be concerned about product safety for several reasons

a) Federal agencies have the power to force businesses that make or sell defective products to take corrective actions

b) Consumers and the government have been winning an increasing number of product-liability lawsuits against sellers of defective products

c) The consumer is demanding safe products

2 The Right to Be Informed The right to be informed means that consumers must

have access to complete information about a product before they buy it In addition, manufacturers must inform consumers about the potential dangers of using their products

3 The Right to Choose The right to choose means that consumers have a choice of

products, offered by different manufacturers and sellers, to satisfy a particular need

a) The government has encouraged competition through antitrust legislation

b) Competition and the resulting freedom of choice provide an additional benefit for consumers by reducing prices

4 The Right to Be Heard The right to be heard means that someone will listen and

take appropriate action when customers complain

a) Today, businesses are listening more attentively, and many larger firms have consumer relations departments that can easily be contacted via toll-free phone numbers

b) Most large cities and some states have consumer affairs offices to act on citizens’ complaints

5 Additional Consumer Rights In 1975, President Ford added the right to

consumer education which entitles people to be fully informed about their rights as consumers In 1994, President Clinton added the sixth right—the right to service,

© 2015 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in

which entitles consumers to convenience, courtesy, and responsiveness from manufacturers and suppliers

Teaching Tip: Go to the Federal Trade Commission’s site and view the rights provided to

consumers (http://www.ftc.gov/consumer) Students may want to know about these rights

B Major Consumerism Forces Major advances in consumerism have come through

federal legislation Major federal laws that have been passed since 1960 to protect

consumer rights are listed and described in Table 2-4

Most recently, the Dodd-Frank Wall Street Reform and Consumer Protection Act of

2010 was passed by Congress to protect consumers and investors

IX EMPLOYMENT PRACTICES Everyone who works for a living should have the oppor-

tunity to land a job for which he or she is qualified and to be rewarded on the basis of ability and performance Although this is an important issue for society, over the years this

opportunity has been denied to members of various minority groups

1 A minority is a racial, religious, political, national, or other group regarded as

different from the larger group of which it is a part and that is often singled out for unfavorable treatment

2 The federal government responded to the outcry of minority groups during the 1960s and 1970s by passing a number of laws forbidding discrimination in the workplace

a) Now, almost 50 years after passage of the Civil Rights Act of 1964, abuses still exist

b) There is a disparity among income levels for whites, blacks, and Hispanics (See Figure 2-3.)

c) Lower incomes and higher unemployment rates also affect Native Americans, handicapped persons, and women

3 Responsible managers have instituted several programs to counteract the results of discrimination

A Affirmative Action Programs An affirmative action program is a plan designed to

increase the number of minority employees at all levels within an organization

1 Employers with federal contracts of more than $50,000 per year must have written affirmative action plans The objective of such programs is to ensure that

minorities are represented within the organization in approximately the same proportion as in the surrounding community

2 Affirmative action programs have been plagued by two problems

a) The first problem involves quotas In the beginning, many firms pledged to recruit and hire a certain number of minority members by a specific date To achieve this goal, they were forced to consider only minority applicants for job openings

b) The second problem is that not all businesspeople are in favor of affirmative action programs, although most such programs have been reasonably

successful

3 Congress created (and later strengthened) the Equal Employment Opportunity

Commission (EEOC), a government agency with the power to investigate

complaints of employment discrimination and sue firms that practice it

4 The threat of legal action has persuaded some corporations to amend their hiring

and promotional practices, but the discrepancy between men’s and women’s salaries still exists (See Figure 2-4.)

B Training Programs for the Hard-Core Unemployed Some firms have assumed the

task of helping the hard-core unemployed: workers with little education or vocational

training and a long history of unemployment Such workers require training; this

training can be expensive and time consuming

X CONCERN FOR THE ENVIRONMENT Pollution is the contamination of water, air, or

land through the actions of people in an industrialized society

1 For several decades, environmentalists have been warning us about the dangers of

industrial pollution

2 Unfortunately, business and government leaders either ignored the problem or weren’t

concerned about it until pollution became a threat to life and health in America

3 Today, Americans expect business and government leaders to take swift action to clean up

our environment—and to keep it clean

A Effects of Environmental Legislation As in other areas of concern to our society, legislation

and regulations play a crucial role in pollution control The Environmental Protection Agency

(EPA) is the federal agency charged with enforcing laws designed to protect the environment

(See Table 2-5.)

Some business owners and managers take the position that environmental standards are too

strict Consequently, it has often been necessary for the EPA to take legal action to force firms

to install antipollution equipment and clean up waste storage areas Experience has shown that

the combination of environmental legislation, voluntary compliance, and EPA action can

succeed in cleaning up the environment and keeping it clean

1 Water Pollution The Clean Water Act has been credited with greatly improving the

condition of waters in the United States However, the task of water cleanup has proved to

be extremely complicated and costly due to pollution runoff and toxic contamination

Improved water quality is not only necessary, but it is also achievable Today, acid rain,

which results from sulfur emitted by smokestacks in industrialized areas, is destroying

many lakes and reservoirs

2 Air Pollution Aviation emissions are a potentially significant and growing percentage of

greenhouse gases that contribute to global warming Air pollution control efforts are

encouraging The EPA estimates that the Clean Air Act eventually will result in the

removal of 56 billion pounds of pollution from the air each year, thus measurably reducing

lung disease, cancer, and other serious health problems

© 2015 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in

3 Land Pollution Today, land pollution is a serious problem

a) The fundamental issues are basically twofold

(1) The first issue is how to restore damaged or contaminated land at a reasonable cost

(2) The second issue is how to protect unpolluted land from future damage

b) The land pollution problem has been worsening over the past few years because modern technology has continued to produce more and more chemical and radioactive wastes

c) To help pay for the enormous costs of cleaning up land polluted with chemicals, Congress created a $1.6 billion Superfund in 1980

4 Noise Pollution The Noise Control Act of 1972 established noise emission standards for

aircraft and airports, railroads, and interstate motor carriers Noise levels can be reduced

by two methods

a) The source of noise pollution can be isolated as much as possible, and engineers can modify machinery and equipment to reduce noise levels

At Issue

The United States has been at the forefront in negotiating opportunities and expanding rights for

minorities Recently, much attention has been given to the rights of religious minorities

Employers must permit employees to engage in religious expression, “unless the religious

expression would impose an undue hardship on the employer.” They are also required to provide

a workplace in which religious harassment of employees is not allowed Undue hardship can be

claimed if the accommodation interferes with legitimate business interests According to the

EEOC:

“An employer can show undue hardship if accommodating an employee’s religious practices

requires more than ordinary administrative costs, diminishes efficiency in other jobs, infringes

on other employees’ job rights or benefits, impairs workplace safety, causes co-workers to carry

the accommodated employee’s share of potentially hazardous or burdensome work, or if the

proposed accommodation conflicts with another law or regulation.”

Workplace proselytizing presents a special challenge to employers: failure to respond to

employees’ complaints about proselytizing could lead to charges of religious harassment, but

requiring a religious employee to cease proselytizing may result in liability for failure to

reasonably accommodate the employee’s beliefs

How should employers deal with proselytizing?

1 Existing laws require “reasonable ac- 1 Existing law allows for undue hardship

commodation.” The proselytizing em- for the employer in terms of increased

ployees could be separated from em- administrative costs, infringement of

ployees who feel harassed by the other employee rights, and diminished practice

efficiency

2 Employees have certain rights to ex- 2 Title VII of the Civil Rights Act does

press their religious views in the not permit employees’ religious exworkplace,

such as the wearing of pression that could reasonably be peryarmulkes or the

display of a cross in ceived by patrons of the business as an a private office

expression of the employer’s views

3 If proselytizing is kept to a mini- 3 Title VII permits restriction of mum

and has no impact on co- religious expression that disrupts operworkers, it could

be considered “rea- ations or is hostile or demeaning to sonable accommodation.”

customers or co-workers

b) If it is impossible to reduce industrial noise to acceptable levels, workers should be required to wear earplugs to guard against permanent hearing damage

B Who Should Pay for a Clean Environment? Government and business are spending billions

of dollars annually to reduce pollution

1 Current estimates of the annual costs of improving the environment are $45 billion

to control air pollution, $33 billion to control water pollution, and $12 billion to treat hazardous wastes

© 2015 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in

2 Much of the money required to purify the environment is supposed to come from already depressed industries

3 The big question is: “Who will pay for the environmental cleanup?”

a) Business leaders believe tax money should be used to clean up the environment

b) Environmentalists believe that the cost of proper treatment and disposal of industrial wastes is an expense of doing business and therefore the

responsibility of the manufacturer

c) In either case, consumers will probably pay a large part of the cost either in the form of taxes or through higher prices

Teaching Tip: Bring in three to five products from home Write down the approximate prices Tell

students how much each cost, and then ask how much more they would be willing to pay in order for these products to be “environmentally friendly.” Products might include an apple or other fruit that was grown with pesticides, a package of non-biodegradable garbage bags, and so forth

XI IMPLEMENTING A PROGRAM OF SOCIAL RESPONSIBILITY A firm’s decision

to be socially responsible is a step in the right direction—but only a first step The firm must

then develop and implement a tangible program to reach this goal

A Developing a Program of Social Responsibility The following steps are required to

implement a social responsibility program

1 Commitment of Top Executives Without the support of top executives, any

program will soon falter and become ineffective

2 Planning A committee of managers should be appointed to plan the program

3 Appointment of a Director A top-level executive should be chosen to direct the

organization’s activities in implementing the plan

4 The Social Audit The director of the program should prepare a social audit for the

firm at specified intervals A social audit is a comprehensive report of what an

organization has done, and is doing, with regard to social issues that affect it

B Funding the Program Like any other program, a program to improve social

responsibility must be funded Funding can come from three sources

1 Management can pass the cost on to consumers in the form of higher prices

2 The corporation may be forced to absorb the cost of the program if, for example, the competitive situation does not permit a price increase

3 The federal government may pay for all or part of the cost through special tax re

ductions or other incentives.

2.7 TEXTBOOK ANSWER KEYS